In 2013 world leaders took a number of important policy decisions and practical steps that helped to tackle key risks, improve situation in the financial markets and sustain the recovery of the international economy.

We see signs of growth in the US, and Japan and the UK are also
picking up. Some economic optimism is connected with the EU.
While growth has continued in emerging markets, it has slowed
down in some of them, not least because of commodity price
volatility. Global economic prospects for 2013 have been marked
down and up repeatedly over the last year, global rebalancing is
incomplete, regional growth disparities are still strong, and
unemployment, particularly among young people, remains too high.
Despite all global efforts, the recovery is still weak. There is
a strong evidence of decoupling between growth and living
standards in the developed economies.

Important international economic challenges, as the G20 leaders
pointed out in the St. Petersburg Action Plan (September 2013),
include the rising volatility of international capital flows,
expectations of eventual monetary policy recalibration in
advanced economies and insufficient levels of private investment
in many countries.

I would like to note some other challenges, which could also
present considerable obstacles to global economic recovery:
income inequality, deflation risks and loss of productivity.

The gap between the rich and poor was one of the focal topics at
last week's Davos World Economic Forum (WEF). As the IMF Managing
Director Christine Lagarde fairly put it: "Business and
political leaders at the WEF should remember that in far too many
countries the benefits of growth are being enjoyed by far too few
people. This is not a recipe for stability and
sustainability". Figures from 2013 show a decline in
productivity in both rich and poor countries. As we all know,
efficiency is crucial for long-term economic growth, and
ultimately for lowering income inequality.

Were the negative trend in productivity to continue, the
consequences for living standards would be gloomy.

The situation is further affected by a gap between GDP and income
growth. They no longer seem to be linked to each other, breaching
the post-WWII social contract.

Last, but not the least, in 2013 most advanced economies – the
US, Japan and the eurozone – had inflation rates well below the
targets set by their central banks. Some experts stress that the
current situation could potentially lead to further deceleration
of consumer prices in developed countries, and therefore to
long-term deflation with a negative by-effect on the world
economic growth.

Russia, as the G20 chair in 2013, tried to do its best to
contribute to the international efforts aimed at making the
global economy more efficient, transparent and sustainable. The
outcome of this work is the St. Petersburg Action Plan, designed
to boost economic activity and job creation, support the recovery
and address near-term risks to the economic outlook, while
strengthening the foundations for strong, sustainable and
balanced growth through ambitious and well-targeted reforms.

Russia strongly believes that joint and coordinated actions are
the most effective way to move the world economy forward. In this
regard it is hard to exaggerate the importance of the G20 as a
forum for open and engaged dialogue about all the economic
challenges we face.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.